EPA Fines Companies for Not Using Biofuel that Doesn’t Exist

Companies that supply transportation fuel will face a hefty fine when they close their books on 2011 because they didn’t comply with a federal mandate to mix in a special type of biofuel into gasoline and diesel—even though the biofuel does not exist.

EPA Imposes Fines

Existing only in a small number of laboratories and workshops, the fuel in question—cellulosic biofuel—is not available on the commercial market. Yet that hasn’t deterred the U.S. Environmental Protection Agency (EPA) from fining companies a total of $6.8 million for noncompliance.

Oil companies could face even stiffer penalties in 2012. EPA demanded transportation fuel companies mix 6.6 million gallons of cellulosic biodiesel into gasoline and diesel in 2011. In 2012 EPA is demanding 8.65 million gallons be blended into gasoline and diesel.

“[Cellulosic ethanol] is not available commercially because the science and economics are not there yet,” said Tom Tanton, president of T2 & Associates, a California-based energy technology and policy consulting group. “In a failed attempt at market pull, the government is penalizing business owners for something that is not under the businesses’ control.”

Cellulosic biofuel is ethanol derived from cellulose, a plant material, Tanton explained. In order to turn the plant material into ethanol (ethyl alcohol), it has to be chemically broken down first into sugar. The remainder of the process (from sugar to ethanol) is the same fermentation process used to produce liquor, beer, and wine. The ethanol is then purified through distillation.

“The technical difficulty stems from trying to break down the cellulose into sugar,” Tanton explained.

Companies Trying Their Best

A company that specializes in developing industrial enzymes is increasing efforts to overcome the difficulty in producing ethanol from cellulose by developing a new enzyme that will help produce more at a lower cost.

Headquartered in Denmark, Novozymes hopes its new Cellic CTec3 enzyme will enable cost-efficient conversion of biomass to ethanol and outperform the firm’s previous product, Cellic CTec2. The company has been dedicated to optimizing these enzymes for more than ten years.

“It is Novozymes’ vision that the biorefineries—ethanol plants—of today form the basis for a bio-based society, one where all the products, chemicals, and materials we use today are made from renewable biomass sugar, rather than oil,” said Poul Ruben Andersen, Novozymes vice president of bioenergy.

This could be good news for oil companies that are being fined for not blending cellulose into vehicle fuel. But Tanton doesn’t expect miracles overnight.

“This is undoubtedly a great scientific advancement, but there are still large hurdles to overcome before commercialization,” Tanton said.